The following discussion of the prior art is intended to place the invention in an appropriate context and to allow the unique characteristics and advantages of it to be more fully understood. However, any discussion of the prior art throughout the specification should in no way be considered as an express or implied admission that such prior art is widely known or forms part of common general knowledge in the field.
Numerous gaming activities are known and have been implemented in a variety of different forms. One broad category of gaming activity is commonly referred to as “pari-mutuel” gaming (also known by terms such as “para-mutual”, “paramutual” and “parimutuel”). In this form, it is typical for the entry fees provided by players in relation to a gaming activity to be combined into a pool, the operator's commissions, fees and charges deducted from the pool, and for the residual amount to define a prize pool for distribution among the winners of the gaming activity, according to predetermined criteria. Lotteries, totalisators and the like fall into this category.
A characteristic feature of pari-mutuel gaming is that the quantum of winnings is not necessarily known in advance, since this will depend upon the number of participants in the gaming activity, and the level of participation of each, which are indeterminate at the outset. Another characteristic feature is that, aside from any ad hoc instances of cross-subsidisation by the gaming operator, the total amount returned to the entrants collectively as prize-money is necessarily less than the total amount received from the entrants collectively as entry fees or bets, due to the fees and charges of the operator as well as taxes and duties of governments and jurisdictional authorities, being deducted from the prize pool, prior to distribution. These fees and charges are significant, often in the order of 15% to 40% of the total prize pool, which is a particular disadvantage of this form of gaming activity, in so far as the participants are concerned.
Another broad category of gaming activity is “fixed-odds” based, usually referred to as wagering, which is typical of most types of sports betting and bookmaking operations. In this form, the odds of a particular outcome are predetermined by the operator when each bet is placed, so that the quantum of potential winnings for each participant is known at the outset, irrespective of the number of bets subsequently placed by other participants. In this case, the total amount returned to the participants collectively as prize-money is not necessarily less than the total amount received from the entrants collectively as bets, and in that sense, the operator bears some risk. However, the operator endeavours, through judgment and experience, to retain a predetermined margin of profit on average over time, and this would typically be in the order of 8% to 10%.
A further disadvantage with both of these forms, and indeed most other forms of gaming, is that in the absence of a winning outcome, the initial value of the bet or participation fee is lost to each participant and fundamentally, the odds are statistically weighted against the players.
Against this backdrop, it is well-known that some personality types fall victim to gaming at significant personal and wider social cost. Others are reluctant to participate in such activities at all, either as a matter of principle or due to inherent aversion to risk, and thereby miss the entertainment value and the opportunity to participate in the upside of winning outcomes.